Recent developments in the nation’s gas industry call for serious concern, and call in question the ability of the federal government to actualise its declaration of the year 2021 to 2030 as a ‘Decade of Gas’.
It is a paradox and tragedy, that since the federal government made the declaration early this year, the domestic gas industry has not remained the same. Nigerians have in a fiat , been subjected to untold hardship as the price of the commodity has suddenly grown wings and soaring skywards.
Unfortunately, government agencies saddled with the responsibility of regulation and the operators are not on the same page, and appear to be singing discordant tunes on the cause of the latest development of soaring price.
For instance, how does one explain it when the Petroleum Products Pricing Regulatory Agency, (PPPRA) says the country imports cooking gas from the United States, Angola and Equatorial Guinea, despite being a gas nation.
According to the PPPRA, the volume of cooking gas supplied to the Nigerian market in August 2021 stood at 85,264.803 MT with the balance of 47,224,346 MT imported from the U.S, Angola and Equatorial Guinea.
Last week’s Tuesday, the Nigeria LNG Limited (NLNG) brought a new twist to the issue, saying marketers were unable to offtake the full 450,000MT of cooking gas allocated to the Nigerian market by the company. NLNG placed emphasis on the fact that the marketers do not have the capacity to take its supply.
In what appears to be a confirmation of the NLNG’s stand, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, attributed the hike in the price of the product to inadequate supply.
Declaring that the supply mechanism for the product in the country has become weak, Kyari said, “Today, this country is under-supplied with gas. I can tell you that we are having difficulty feeding our network across the country with gas every day; it is a trouble to deliver gas. Once your supply is weak, it will affect pricing.”
Last year, the Central Bank of Nigeria (CBN) in an effort to address issues around the industry announced that it would provide N250 billion intervention facility for the national gas expansion programme aimed at making Compressed Natural Gas (CNG) the fuel of choice for transportation and Liquefied Petroleum Gas (LPG) for domestic cooking, captive power and small industrial complexes.
The question which readily comes to mind is, what went wrong? If the management of NNPC, the national oil company with a subsidiary involved in the production of cooking gas, was in the know of the deplorable state of supply facility; and the NLNG also was never in the dark about the reality that marketers don’t have the ability to off-take supply and with CBN’s declaration of intent to intervene, why did government, in the face of all this, fail to put the infrastructure in place, before going ahead to declare the Decade of Gas?
Why do we as a people focus more on export of our raw materials rather than processing them at home to add value. For us at EnergyDay, it is embarrassing to say that Nigeria imports cooking gas even though we are rated as the 7th country with the highest gas deposit globally.
It would seem a misplaced priority to sell cheap and import with the hard currency we don’t have.
Unfortunately, government officials are so hypocritical in their utterances that one wonders whose interest they serve. The people or themselves?
Or how do we explain that despite the decline in the volume of gas supplied to the market in August as reported by the PPPRA. The Executive Secretary, PPPRA, Abdulkadir Saidu, commenting on the report said, “It is worthy of note that since the declaration of the “Decade of Gas”, by His Excellency, President Muhammadu Buhari, GCFR and the Honourable Minister of State for Petroleum Resources, Chief Timipre Sylva, the nation has witnessed a significant increase in the volume of LPG produced locally.
“This is due to the commitment of the Federal Government in promoting gas penetration, to ensure a clean source of energy for cooking, power generation and transportation.
“The Petroleum Industry Act (PIA) as the first law that recognizes the Oil and Gas midstream sector will promote and protect gas-based “investments and optimize the nation’s enormous gas potentials while ensuring that Nigeria transit to become a net-zero emission nation.
“The PPPRA wishes to reiterate its continued support for the Federal Government’s policy to deepen LPG penetration in the country and create a healthy life for Nigerians”.
EnergyDay is worried that when government agencies make such commendation in the face of failure the possibility of improvement becomes doubtful.
Contrary to government’s and its agencies’ perception of currently doing well in the industry, the true situation is that the nation appears to be going backwards.
The truth is that the current spike in the price of the product, necessitated by government’s inability to give proper direction to the market has brought unintended consequences on Nigerians as more households, restaurants and individuals have resorted to the use of charcoal and firewoods.
Investigations by EnergyDay showed that households and restaurants that had bid goodbye to firewood and charcoal usage have begun to embrace them again. The implication is that more trees might be felled in the coming months and years if the situation is not addressed.
The import is further worsening the deforestation challenges in the country. A factor said to be the root cause of the clashes between farmers and herders who are migrating from deforested parts of the country to places that still have pasture for their animals.
Since late last year, the price of cooking gas has been on a steady rise and has so far exceeded 100 per cent.
We are persuaded to call for quick intervention on side of government, given that Nigerians are going through enormous economic challenges, which have further been exacerbated by rising insecurity and uncertainty.
It is important to emphasize that the present development is uncalled for in an era when energy transition and zero emissions is the order of the day.
Environmentalists have expressed concerns that the development is inimical to national development.
A former Deputy Vice Chancellor of the University of Lagos and an environmentalist, Prof. Babajide Alo, put the issue in perspective when he said the hike in price of domestic gas did not augur well for the country, especially with the environment.
“There are three indirect impact of this hike in gas price vis-a-viz health implication as a result of incomplete combustion. The smoke from the fuel wood injures peoples’ health. The trees are the zinc for green house gases; once they are removed, the environment is exposed to harsh climate conditions. There is abundance evidence to that effect.
“To mitigate these effects, government should subsidise the price of domestic gas and make it more affordable for the people. Also, we need to plant more trees rather than cut them.”
We recall that in September 2016, President Muhammadu Buhari signed the historic Paris Agreement on Climate Change, where he committed Nigeria to reducing “Green House Gas Emissions unconditionally by 20 per cent and conditionally by 45 per cent” in line with Nigeria’s Nationally Determined Contributions (NDCs).”
Buhari had stated that Nigeria’s commitment to the Paris Agreement was articulated through its NDCs “that strive to build a climate resilient society across the diverse terrain of Nigeria.”
With Nigerians turning to charcoal and firewood due to unaffordability of cooking gas, the country’s implementation of the agreement has no doubt been hampered. There is need for rejuvenation.